Government presents financial compensation plan for businesses hurt by war

The government announces its plan for compensating those affected financially by the ongoing war with Iran, including grants for businesses whose income streams have been reduced and workers who have been furloughed, “with the aim of creating as broad a safety net as possible for the working public.”

The outline is presented by officials at a joint press conference featuring Finance Minister Bezalel Smotrich, Knesset Finance Committee Chairman Moshe Gafni, Business Sector Presidium chair Dubi Amitai, and Histadrut Labor Federation chief Arnon Bar-David.

According to the Finance Ministry, the outline is focused on maintaining economic “continuity,” with an emphasis on small and medium-sized businesses. Businesses with an annual turnover of NIS 12,000 ($3,450) to NIS 400 million ($114 million) that has decreased by more than 25% month over month will be compensated from the Property Tax Compensation Fund.

Businesses bringing in less than NIS 300,000 ($86,000) a year will be eligible for a fixed business continuity grant “depending on the level of damage to the business,” while businesses earning NIS 300,000 to NIS 400 million will be eligible for the reimbursement of 7%-22% of their expenses, “depending on the rate of damage to business turnover, as well as a refund of 75% of salary expenses in relation to the level of damage.”

Businesses with an annual turnover of NIS 300,000 to NIS 100 million ($28 million) will have compensation capped at NIS 600,000 ($172,000).

Employees placed on unpaid leave due to the cessation of economic activity during the war will receive payments from the National Insurance Institute and will not be forced to use any of their accrued vacation days.

“The activation of the compensation track for businesses throughout the country sends a clear message to the citizens of Israel: You are not alone,” Smotrich declares.

The outline is welcomed by the Histadrut’s Bar-David, who says the labor federation reached an agreement with the government in order to “provide certainty to the economy and to the workers of Israel.”

“We did it during COVID, we did it at the beginning of the war [with Hamas], and we are doing it now as well,” he says.

The Business Sector Presidium’s Amitai also praises the new outline, stating that “thanks to national responsibility and close cooperation, we were able to reach a compensation outline that will provide certainty to businesses and employees and contribute to the stability of the economy.”

Shortly after the outbreak of the war with Iran, Smotrich announced that he was consulting with Amitai and Bar-David and that they would decide on steps “to support the economy and workers and to maximize the functional continuity of the economy during the war.”

The Federation of Local Authorities in Israel has reported that around 9,000 people have been displaced from their homes since Israel’s operation against Iran began.